The Trump administration’s announcement at the end of January to halt billions in foreign aid from the US Agency for International Development (USAID) and the US State Department came as a surprise to humanitarian agencies globally.
In Ukraine, a nation that has received approximately $7.6bn in humanitarian aid and development support from USAID and State Department resources since Russia’s full-scale invasion commenced, this shock has also been significant.
“It was entirely unforeseen. We heard the news, but we never anticipated it would be so extensive and so immediate,” Ivona Kostyna, chairperson of Veteran Hub, shared with RTÉ News from her Kyiv office.
Veteran Hub offers assistance to Ukrainian war veterans and their families, which includes psychological support and guidance on transitioning to civilian employment. The organization operates centers in Vinnytsia, Kyiv, and Dnipropetrovsk.
USAID has provided Ukraine with billions of dollars in humanitarian aid since the war began.
Ms. Kostyna’s situation and that of the charity’s 100 staff members mirrors that of countless humanitarian workers around the globe who collaborate with USAID and other US government aid agencies.
Upon receiving the urgent news on January 24 that their US funding would be suspended, the charity had to consider slashing 31 of its 100 positions.
The funding freeze also resulted in about 400 inquiries to Veteran Hub centers going unanswered during the last week of January.
“We received a post-factum stop work order, which left us no opportunity to re-establish and secure contracts that were intended to be long-term,” stated Ms. Kostyna.
“For us, this means we can’t respond to calls from our clients. It means we can’t pay salaries to our team members, many of whom have lost loved ones in the conflict.”
Fortunately for Veteran Hub, the local government in Vinnytsia and other donors have pledged to cover the charity’s staff salaries starting February 1 for three months. This provides the organization some breathing room until the end of April, but beyond that, the future of their operations remains uncertain.
A support worker speaks to a veteran at Veteran Hub in Vinnytsia (Courtesy: Veteran Hub)
US President Donald Trump’s executive order, which enacted a 90-day freeze on all foreign aid, has sparked speculation that his administration may be looking to downsize the agency’s operations or integrate it into the State Department.
In 2023, the US government allocated over $64bn towards foreign aid, and a significant portion of these funds could be reduced during the ongoing review by the new administration.
Funding for essential food assistance programs remains unaffected by the new directive.
The USAID website itself has been put on hold, featuring two paragraphs indicating that, starting February 7, all USAID “direct hire personnel” worldwide will be placed on administrative leave, with the exception of senior leadership. Approximately 10,000 individuals work for the agency.
This marks a significant policy shift as the US has been the largest donor of humanitarian aid globally.
Last year, the US accounted for around 41% of all global humanitarian assistance, according to the United Nations Office for the Coordination of Humanitarian Affairs.
Simultaneously, reducing foreign aid funding aligns with the Trump administration’s ‘America First’ policy, a fundamental aspect of Mr. Trump’s election campaign that aims to prioritize domestic US interests.
Just three years ago, Marco Rubio was advocating for the work of USAID.
Now, as US Secretary of State, he is spearheading Mr. Trump’s initiative to review the agency’s operations.
Marco Rubio is leading Donald Trump’s charge to review the agency’s work.
The funding freeze has also impacted humanitarian organizations receiving US foreign aid in neighboring countries like Poland, which welcomed over one million Ukrainian refugees following Russia’s extensive invasion three years ago.
“We had to withdraw our staff from projects overnight,” a humanitarian official in Warsaw relayed to RTÉ News.
“Our staff are worried. We often work with very vulnerable individuals. This situation negatively affects their mental health, pushing them into a more precarious state.”
USAID has been active in Ukraine since the early 1990s, shortly after the country gained independence from the Soviet Union.
The agency’s efforts extend well beyond funding humanitarian projects. Of the $7.6bn allocated by USAID for Ukraine-centered projects since February 2022, around $5bn was directed towards development assistance.
Additionally, USAID facilitated approximately $30bn in US budgetary support for Ukraine during that period.
This funding has covered the construction of bomb shelters, salaries for personnel involved in development initiatives, local procurement costs, and provided expertise in reforming the energy sector, public governance, and advancing digitalization.
A USAID facility in Kyiv receives a shipment of vegetable seeds and household goods.
Dmytro Boyarchuk, a Ukrainian economist, told RTÉ News that USAID has played a vital role in bolstering Ukraine’s agricultural and energy sectors since the onset of Russia’s invasion.
“They acquired equipment for the agricultural sector to replace destroyed facilities. Farmers required liquidity, and the support from USAID has been critical,” noted Mr. Boyarchuk, who serves as the executive director of CASE, a Kyiv-based think tank.
CASE has collaborated closely with USAID in recent years to drive economic reforms in Ukraine’s public sector.
Without the agency’s funding in the future, Mr. Boyarchuk indicated that many local stakeholders in Ukraine’s development sector must adapt their operational methods.
Otherwise, he cautioned, “they will not survive for sure”.
USAID also financed independent media outlets in Ukraine to foster media diversity and counter Russian disinformation campaigns.
One such outlet is ‘Ukrainer’, a community-focused media platform that publishes articles and videos about Ukrainian culture and history in various languages.
The platform’s founder, Bohdan Logvynenko, remarked that while they have never relied solely on a single donor, the suspension of USAID funding “has certainly affected our capability to plan long-term projects and maintain specific initiatives”.
A few individuals I spoke with highlighted USAID’s flexibility in considering diverse project types for funding in Ukraine, in contrast to the EU’s more stringent funding processes.
Innovative projects such as funding independent media outlets and granting support for Ukrainian farmers to purchase fertilizers capitalize on US soft power. However, this approach is less aligned with the philosophy of the Trump administration.
“President Trump made it clear that the United States will no longer indiscriminately distribute funds without considering returns for the American taxpayer,” stated Tammy Bruce, spokesperson for the US Department of State, in a press release on Wednesday.
“Reviewing and realigning foreign assistance on behalf of hardworking taxpayers is not just appropriate; it is a moral obligation.”
European Union funding might help compensate for some of the financial gaps left by USAID and other US foreign aid programs after the State Department’s cost-cutting review is concluded.
Collectively, the European Investment Bank’s ‘EU for Ukraine Fund’ and EU humanitarian aid since the onset of Russia’s invasion totals approximately €2bn.
However, the abrupt funding freeze has already prompted Ukrainian NGOs to seek new funding options.
“We can’t afford to wait for the US to determine their policies,” mentioned Ms. Kostyna, the chairperson of Veteran Hub.
“We must secure our services and, now that the initial crisis has passed, we will begin fundraising for more sustainable solutions.”
